Despite losing about $1 billion from its Obamacare public exchange programs, UnitedHealth Group bounced back with double-digit profits and sales gains during the third quarter, the company said Tuesday.
The Minnetonka-based health insurance giant reported $46.3 billion in sales for the July to September period—a $4.8 billion, or 12 percent, year-over-year increase. Profits rose 23 percent from $3 billion a year ago to $3.6 billion most recently. The $2.17 per share growth prompted UnitedHealth to raise its earnings outlook for the year from $7.80 to $7.95 a share to $8 a share.
UnitedHealth said revenues across all of its domestic businesses experienced double-digit percentage gains as an additional 200,000 more people signed on for the company’s services. Altogether, more than 2 million Americans started using UnitedHealth this year, amounting to $4.4 billion in revenue for the third quarter and $37.3 billion so far this year.
“Our growth indicators are positive as we conclude 2016, and we expect to be well positioned in 2017,” UnitedHealth CEO Stephen Hemsley said in prepared remarks.
Optum was UnitedHealth’s cash cow in the third quarter, as the subsidiary made up nearly half of UnitedHealth’s business. Optum’s revenues grew 34 percent from a year ago, totaling to $21.1 billion, while its profits rose 28 percent year-over-year to $1.8 billion.
Investors reacted strongly to UnitedHealth’s positive third quarter as the company’s stock rose more than 8 percent in early morning trading. After closing at $134.13 on Monday, the stock was trading at $143.50 during Tuesday afternoon.